Bank First Q2: NII and EPS rise, hefty dividend and buybacks amid deposits decline, Centre 1 deal

Bank First Corporation (NASDAQ: BFC) - 10‑Q snapshot (quarter ended June 30, 2025)

Quick summary - what's happening inside:
Management is driving higher net interest income by repricing new/renewed loans in a higher‑rate environment while cutting reliance on low‑yield cash; the bank is returning capital to shareholders (share repurchases and a large dividend), continuing M&A activity (merger agreement signed July 18, 2025) and investing in branches and digital platforms. At the same time operating expenses and some credit metrics increased modestly, deposits fell and the securities portfolio carries unrealized losses from rate movements.

Key income‑statement and balance‑sheet facts (as reported)
- Total assets: $4,365,082 (in thousands)
- Total deposits: $3,595,424 (in thousands) - down $65,649 (in thousands) vs. 12/31/2024
- Loans (gross): $3,580,357 (in thousands); Loans, net: $3,536,065 (in thousands)
- Allowance for credit losses - loans (ACL‑Loans): $44,292 (in thousands) - ACL/loans 1.24% at 6/30/2025
- Securities available for sale - fair value: $167,209 (in thousands); unrealized losses aggregated $11,028 (in thousands)
- Stockholders' equity: $612,333 (in thousands)

Income statement highlights - Q2 2025 vs Q2 2024 (reported)
- Net income (Q2): $16,875 (in thousands) vs $16,059 (Q2 2024)
- Net income - six months: $35,116 (in thousands) vs $31,471 (YTD 2024)
- Earnings per share - basic / diluted (Q2): $1.71 / $1.71; six months: $3.53 / $3.53
- Interest income (Q2): $54,575 (in thousands); Interest expense (Q2): $17,873 (in thousands)
- Net interest income (Q2): $36,702 (in thousands); tax‑equivalent net interest margin (Q2): 3.72% (three‑month), 3.69% (six‑month)
- Provision for credit losses (Q2): $200 (in thousands); provision (six months): $600 (in thousands)
- Noninterest income (Q2): $4,921 (in thousands) - down 16% YoY; Noninterest income (six months): $11,509 (in thousands), up 12% YoY
- Noninterest expense (Q2): $20,756 (in thousands) - up 9% YoY; Noninterest expense (six months): $41,360 (in thousands)

Capital, liquidity and credit metrics
- ACL‑Loans to nonaccrual loans: 340% (6/30/2025)
- Nonperforming loans (total): $13,597 (in thousands); OREO: $- at 6/30/2025 (was $741 at 12/31/2024)
- Net charge‑offs (six months): $858 (in thousands) reported YTD total charge‑offs of $858 for the period ending 6/30/2025 (note: roll‑forwards reported in thousands)
- Regulatory capital - Company total capital to RWA: 13.08%; CET1: 11.61% (Company); Bank total capital to RWA: 12.19%; Tier 1 to RWA 11.03% - all above "well‑capitalized" thresholds reported

Recent capital actions & corporate moves
- Share repurchases: cash repurchases of common stock totaled $22,043 (in thousands) in the six months ended 6/30/2025; trading activity shows 143,720 shares repurchased in Q2 (average price $109.11).
- Dividends paid (six months): $43,639 (in thousands); note the financials record a cash dividend of $3.95 per share in the June distribution (reflected as $39,148 in the second quarter equity movement).
- Subsequent event: Agreement to merge with Centre 1 Bancorp, Inc. announced 7/18/2025 - pro forma (6/30/2025) combined assets ~ $5.9 billion, loans ~ $4.6 billion, deposits ~ $4.9 billion.

Positives (income‑statement & operating)
- Strong core performance: net interest income rose to $36.7M in Q2 and $73.2M YTD driven by loan repricing and higher yields on new/renewed loans.
- Improving margins: taxable‑equivalent NIM strengthened (3.72% Q2; 3.69% YTD).
- Profitable growth: Q2 net income and EPS up vs prior year; six‑month net income +$3.6M YoY.
- Credit cushion: ACL‑Loans of $44.3M (1.24% of loans) provides coverage and ACL/Nonaccrual remains well above 100%.

Negatives / risks (income‑statement & operating)
- Noninterest income weakness in Q2: total noninterest income fell to $4.9M (-16% YoY) driven by lower Ansay income, MSR valuation drag and one‑time items in prior year.
- Expense pressure: noninterest expense rose (Q2 +9% YoY) - branch remodels, new branch opening and digital platform upgrade drove occupancy and data processing costs.
- Deposit outflows & liquidity mix: cash and cash equivalents declined $141.0M since year‑end; deposits fell $65.6M, increasing reliance on loan funding and modest draw on borrowings.
- Securities portfolio markdowns: available‑for‑sale unrealized losses $11,028 (in thousands) from rate moves - no credit impairment flagged but market volatility remains a risk to OCI.
- Rising nonperforming loans: nonaccrual loans increased to $13,034 (in thousands) - monitoring required, though coverage remains healthy.
- Capital returned while deploying growth: substantial dividend ($39,148 in Q2) plus buybacks ($22.0M YTD) reduced equity vs year‑end despite earnings - watch capital ratios if M&A closes.

Analyst take - concise verdict
Bank First (NASDAQ: BFC) is executing a typical community‑bank playbook: harvest higher yields from loan repricing, invest in growth (branches, digital), return capital to shareholders and pursue consolidation via a pending merger. The income statement shows healthy net interest income and margin expansion, offset by weaker fee income and rising operating costs. Credit metrics are acceptable and reserves look sufficient for the current portfolio, but deposit shrinkage, securities unrealized losses and higher operating spend are near‑term negatives to watch - especially as the Centre 1 acquisition and substantial shareholder distributions (dividend + buybacks) change the capital and funding mix.

If you want, I can prepare a 1‑page summary for investors (bullet metrics + one‑paragraph outlook) or a short risk checklist tied to the Centre 1 merger and the bank's recent capital actions.